Air Quality Management

Cabot is committed to being a good steward of all of our natural resources, including protecting the air quality surrounding our operations. Ensuring that natural gas does not escape into the surrounding air is not only a requirement of the many laws and regulations at both the state and federal levels, but a sound business practice, as it maximizes the volume of gas available for sale to our customers. Our air quality programs work to ensure that our operations meet or exceed these federal and state regulations that establish emissions limits, emissions control requirements, monitoring, testing, recordkeeping and reporting requirements, to protect and maintain air quality.

Overview of Operation

The EPA defines Cabot operations as Onshore Petroleum and Natural Gas production. As a producer, emission sources at Cabot facilities primarily consist of production equipment designed to extract, separate, process, store and transfer oil, gas and produced water, to downstream processing facilities or transmission pipelines. As part of normal operating processes, some of this equipment generates atmospheric emissions that may be recovered, captured, neutralized, vented or combusted.

The graphic to the left presents the emission makeup of Cabot’s 2016 operations.

On an annual basis, Cabot conducts benchmarking of the company’s atmospheric emission performance to identify opportunities and challenges relating to various emission sources. At the federal level, greenhouse gases (GHGs) are regulated under two programs: Title 40, Part 98, Subpart W of the Code of Federal Regulations (CFR), “Mandatory Greenhouse Gas Reporting,” which mandates annual reporting of GHGs and 40 CFR Part 60 Subpart OOOOa, “Standards of Performance for Crude Oil and Natural Gas Facilities,” which imposes emission standards, operation standards and control requirements, as well as recordkeeping and reporting requirements for operations resulting in the emissions of both GHGs and volatile organic compounds (VOCs). Whereas Subpart OOOOa enforces how Cabot conducts our operations to reduce emissions and impacts on the ambient air, Subpart W mandates specific procedures for data gathering, integrity review and calculation methodology for annual reporting. In addition to these federal programs1, Cabot also implements internal processes and procedures to ensure our performance meets or exceeds regulatory requirements.

Cabot’s commitment to operational excellence leads to the development of internal guidelines, processes and practices that aim to comply with or exceed regulatory requirements. Cabot performs annual benchmarking of GHG emissions to identify opportunities for emission reduction. For oil and gas producers such as Cabot, the two key GHGs that make up the majority of our total emissions are carbon dioxide (CO2) and methane (CH4). The EPA and industries measure the impacts of GHGs in units of CO2 equivalents (CO2e), which is based on converting methane, nitrous oxides and fluorinated gases to CO2 using global warming potential factors (GWP)2. Cabot’s emissions of other greenhouse gasses is negligible.

The primary contributor to methane emissions is from natural gas leaks during liquid unloading operations or fugitive emissions, while the primary contributor of carbon dioxide emissions are from combustion, such as flaring or firing of fuels in engines. The analysis of our emission profile enables us to track carbon dioxide and methane emissions independently to identify equipment and/or emission sources with the most potential for emission reduction.

To help identify and minimize methane emissions, Cabot employs the use of optical gas imaging (OGI) cameras for leak-detection inspections. The key members of our team, including Facility Engineers, Operators, and EHS staff members, are trained and certified Thermographers from the Infrared Training Center (IFR). The training provides our operators with not only the operating techniques and basics of thermal science, but also an understanding of the regulatory framework, safety practices and techniques and interpretive skills.

The key to the effective use of the OGI camera technology is training and preparation. Cabot’s Thermographers are trained and required to conduct each leak inspection in accordance with the regional Monitoring Plan and be prepared to provide immediate corrective actions should a leak be discovered. On a quarterly to semi-annual basis, Cabot conducts fugitive leak monitoring of our assets, consisting of wellsite, central tank battery, and satellite facilities in the Gulf and Appalachian Basins. The Monitoring Plan is developed in accordance with requirements from the New Source Performance Standards Subpart OOOOa as well as the Company’s internal policies and serves as a “not-to-deviate” guidance document for every inspection. Our inspection teams travel with the necessary tools and parts to make repairs as leaks are detected in the field. This practice results in over 90% of leaks being restored to zero-leak status the same day of discovery. Those that are not fixed the same day, primarily due to unavailable parts, are expedited on the maintenance list. Although both federal and state regulations allow for a defined time period to fix leakages (i.e., 15 days to two years), in most cases, the practice of conducting a leak survey fully prepared to respond has enabled Cabot to take immediate corrective action, which reduces the quantity of leaks into the ambient air.

To reduce CO2 emissions, Cabot focuses on the operation of engines during drilling, completion and production as well as green completion practices. Subpart OOOOa defines green completion as the total capture of gases and allows for flaring or venting only when it is not technically feasible to capture the gases or the situation presents a hazardous condition.

Cabot makes every effort to reduce the need for flaring through technical and engineering design as well as operational processes prior to conducting/beginning completions.

Flaring of flowback gas takes place during Cabot’s well-completion process and is important for two reasons: safety and air quality. Flaring controls the venting of a flammable gas that could present a fire hazard at our wells. Cabot’s operating practice discourages flaring unless flaring is necessary due to safety concerns and/or required by federal, state, or local agencies. Similar to our flaring policy, Cabot does not allow venting of natural gas unless it’s necessary to alleviate a safety concern. Cabot makes every effort to reduce the need for flaring and venting through technical and engineering design as well as operational processes prior to conducting/beginning completions. One significant consideration is to shorten the timeline between completion and production by expediting the installation of production equipment and infrastructure. All completion activities in the North region follow green completions guidelines, with flaring being performed only when extenuating circumstances arise to ensure safety.

GHG Compliance Team

We have established a GHG Compliance Team that gathers information, develops plans to monitor our emissions and manages our reporting requirements. The work of this team led to the development of an air module in our Asset and Compliance Tracking System (ACTS), which is the data-gathering and report-generating platform for GHG emissions that supports our evolving air quality program. On a daily basis, operation data is pushed from the field, from various operational databases, to ACTs, which is configured to calculation emissions. As an oil and gas producer, Cabot is subject to the annual reporting of GHG emissions under 40 CFR Part 98, Subpart W, which mandates source-specific calculation methodologies and emission factors. Cabot is also subject to various operating practices under 40 CFR Part 60, Subpart OOOOa. As required, Cabot monitors and quantifies emissions under the mandates of these two regulations, along with other state rules. The guide posts for Cabot’s emission inventory are:

The GHG Compliance Team develops training materials around new or revised regulations and other environmental compliance topics and presents the information to employees in formal training sessions. The training is rolled out to superintendents, operators, foremen and other key personnel to communicate new information and expectations so policy and procedure changes are implemented consistently across regions and in full compliance with the reporting requirements of the law.

Emission Reduction Programs and Achievements

Cabot is committed to the responsible reduction of GHG emissions. Our initial GHG data gathering program was implemented in 2011 and we have been engaged in extensive efforts to reduce our GHG emissions from all sources, including heaters, pneumatic devices, drilling rigs, venting and flaring in completion operations, engines in completion operations and fugitive methane.

For example, an analysis of our efforts over a five-year period shows methane reductions equivalent to removing GHG emissions from 1,933 passenger vehicles driven for one year.

One of the initiatives we undertook was to use compressed natural gas to displace gasoline and diesel to fuel our own vehicles and power drilling equipment. For every unit of compressed natural gas we burn instead of gasoline or diesel in our operations — in drilling and transportation vehicles — we reduce our CO2e emissions by at least 25 percent.

Another example of these efforts is our program to install and replace manual pneumatic controllers with zero-bleed controllers. Cabot’s internal policy has been to install zero-bleed pneumatic controllers at all new facilities operating on natural gas or employ instrument air and convert all existing controllers to zero-bleed or remove them from service. In 2016, Cabot completed the conversion of the existing sources to zero-bleed, resulting in a reduction of GHG emissions equivalent to removing 3,356 passenger vehicles from the road for one year3. As of the 2nd quarter 2017, Cabot no longer operates any high bleed pneumatic controllers.

Similarly, Cabot continues the process of phasing out diesel generators in favor of transitioning our oil well pads to electric power. Through this effort, we have been able to continuously reduce the number of diesel generators at our facilities with plans to phase out all diesel generator usage where operating conditions permit. The CH4 reduction from the total diesel generators retired in recent years is equivalent to the energy use of 2,864 homes for one year4.

As part of Cabot’s commitment to support practical and sustainable environmental programs, we are an original member and supporter of API’s “The Environmental Partnership” program launched in December 2017. We will participate with a group of our industry’s largest companies to reduce Methane and VOCs in our operations through the sharing of best practices and implementing innovative strategies as they are developed. Cabot is excited to be an original member of The Environmental Partnership and we look forward to the continued growth in its membership and the resulting benefits for Cabot and all of our stakeholders. For more information on The Environmental Partnership please see: https://theenvironmentalpartnership.org/

Cabot also participates in the EPA Natural Gas STAR program. The Natural Gas STAR program is a voluntary program that encourages oil and natural gas companies to adopt proven, cost-effective technologies and practices that improve operational efficiencies and reduce methane emissions to the atmosphere.

1 Cabot is also subject to state regulations that impose even more stringent requirements on certain emission sources.

2 The Global Warming Potential (GWP) was developed to allow comparisons of the global warming impacts of different gases. The current GWPs over 100 years are 1 for CO2, 25 for CH4, and 298 for N2O. The GWPs allow for the conversion of different gases to a common unit, namely CO2e.